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South America

Ecuador

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Employer of Record (EOR) in Ecuador

What you'll learn

  • Country Introduction
  • Tax Breakdown for Employers
  • Statutory Leave Laws
  • Minimum Wage and Working Hours
  • Termination Process
  • Additional Information
Ecuador Introduction

Ecuador is a country in South America whose name translates to “Equator”, which runs along it. It is bordered by Peru, Colombia, and the Pacific Ocean, and also contains the Galápagos Islands in the Pacific. Ecuador is considered a middle-income and developing country with an incredibly diverse landscape.

Paid Leave and Statutory Leave

Parental Leave

Pregnant employees are entitled to 12 weeks of paid maternity leave, which the employer covers 25% of the wages while while social security covers the rest. Fathers are also granted 10 days of paid paternity leave, which can increase in the case of difficult deliveries.

Sick Leave

Employees in Ecuador are entitled to paid sick leave for up to 2 months, which is covered partially by the employer and partially by Social Security. After 4 days the salary payment becomes a partial salary.

Paid Leave

There are 14 public holidays in Ecuador, and employees are entitled to 15 days of paid time off each year. Employees can also receive hospitalization leave, adoption leave, and bereavement leave.

Wage Requirements and Working Hours

The minimum wage in Ecuador is currently USD 425 per month, with a workweek of 40 hours per week at 8 hours per day. Any work done past these hours is paid as overtime with a maximum of 4 hours per day or 12 hours per week. Overtime hours are paid at either 150% or 200% of the regular salary.

Termination Process

Process

Employment contracts can be terminated with cause such as dishonesty, fraud, negligence, or other work-related offenses. At-will termination is possible in Ecuador outside the probation period but includes higher severance payment.

Notice Period

There is no notice period required by law, but most employers stipulate a notice period in their employment contracts.

Severance Pay

Employees who do not receive the appropriate notice or are terminate at-will are entitled to a severance package that is calculated as 1 month of salary for each year the worker has been at the company, up to 25 years.

Additional Information

Ecuador has mandatory 13th and 14th month salary bonuses. The 13th month salary is equivalent to one month of wages paid around December 22nd each year. Ecuador’s 14th month salary is equal to the national minimum wage for one month ($425 for 2022), and is paid usually in March or August depending on the company.

OVERVIEW
Language(s):
Spanish
Currency:
United States Dollar (USD)
Capital City:
Quito
Population:
18.2 Million
Cost of Living Rank:
85th
VAT (Valued Added Tax):
12%
Employer TaxES
12.15%
(estimated)

★  12.15% - Social Security

Simplified Global HR and Payroll.
Let’s work on it together.

We've made the process really simple
with only 3 steps.

1

Remote candidate

You've sourced a full-time employee or contractor located in a country where your company is not incorporated.

2

Cost Calculation

Pass us the details of your candidate and we will let you know exactly what it costs to employ your candidate in that country.

3

Onboarding & Admin

Sit back and relax as we onboard your new team member and take care of all the local compliances and admin work.

Same-day onboarding
Best Pricing
Available in 150+ countries
How Remofirst employs in Ecuador

It can be prohibitively expensive to establish an entity in every country you want to hire talent in, so Remofirst will hire and pay your employee on your behalf while you manage their daily duties. Remofirst will handle formal HR procedures and employment contracts that adhere to local laws, so that you can simply approve invoices via our platform. When you work with an Employer of Record (EOR) you can compliantly hire the best employees around the world.

How employees in Ecuador get paid
Your employee's hours, time off, holidays, bonuses, and commissions are automatically calculated into payroll. Remofirst will invoice you in either US Dollars (USD), Euros (EUR), British Pounds (GBP), Canadian Dollars (CAD), or Singapore Dollars (SGD) around the 15th of each month to make sure your employees in Ecuador are paid on time in United States Dollar (USD). To make it even easier, you can summarize your entire global team's salaries to aggregate them into one payment (instead of many individual payments).
Full-time Employees vs Global Contractors

Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.

Dependable support for employees
Whenever the employee or employer has a question about benefits, Visas, or anything else related to international employment in Ecuador, they can use our platform's chat function to get answers from our team of experts. Every client of Remofirst also receives a dedicated account manager that will serve as a point of contact for global HR support.